Sukanya Samriddhi Account Interest Rate _{Last Updated : 20 Jan 2020}

Sukanya Samriddhi Yojana is a government scheme that was launched in the year 2014 by Prime Minister Narendra Modi. SSY interest rate is revised on a quarterly basis. SSY aims to provide financial security to a girl till the time she gets married. The Sukanya Samriddhi Yojana Account can be opened for girl children below the age of 10 years. The account matures in 21 years from the time it has been opened.

For more information, Check out related articles Sukanya Samriddhi Yojana Calculator, Sukanya Samriddhi Yojana Age Limit, Sukanya Samriddhi Account Benefits & SBI Sukanya Samriddhi Account

Sukanya Samriddhi Account Interest Rate

Based on the Government Security (G-sec) yields, the Indian Government decides the rate of interest for the scheme on a quarterly basis. The interest rate is compounded on a yearly basis and is credited to the account. Subscribers can also opt for monthly interest. For a month, the rate of interest is calculated on the minimum balance that is present in the account between the end of the 10th and the last day of the month. For the fourth quarter of the FY2018-2019, the rate of interest was 8.5%. 

The Government has ensured that the Sukanya Samriddhi Account interest rate is lucrative enough for parents to be encouraged to invest more for the future security of the girl child. The interest rate for the financial year 2019-2020 is 8.50%. The interest rate pertaining to the current quarter (1 April 2019 – 30 June 2019) is 8.50%, and it is compounded on an annual basis. This is also the best interest rate among other savings schemes, including PPF.

Effectively, the parent gets a competitive interest rate on the Sukanya Samriddhi Yojana Account, in addition to a tax exemption under Section 80C of the Income Tax Act, 1961. There is no other deposit scheme in the country that offers such a high rate of interest, tax exemption, and security for the girl child.

The SSA interest rate change chart is as shown below:

The comparison of Sukanya Samriddhi interest rate with other popular savings instruments such as PPF, RD and FD is shown below:

SSY Interest Rate Calculation

To explain how SSY interest rate calculation works, here is an example. Mrs. Malvika, the parent of a 3-year old girl child, started investing in SSY from the financial year 2015-16 onwards. The interest rate considered for this SSY calculation is current. Let’s assume that the deposit amount and the date of deposit remain the same for 21 years. She contributes Rs.10,000 on 1 April of each financial year. The maturity amount that her daughter can avail at the end of 21 years is as follows.

FAQ’s 

1. Is it possible to close the SSY account before maturity? 

No, it is not possible to close the SSY account before maturity. 

2. Can a loan be availed on an SSY account? 

No, loan facility on an SSY account is not available. 

3. Can a girl child open more than one SSY account? 

No, a girl child can have only SSY account under her name. 

4. Is the transfer of an SSY account from one bank to another possible? 

Transfer of an SSY from a bank to a post office and vice versa is possible. 

5. Are there any penalties if the subscriber fails to deposit money in SSY account? 

A Rs.50 penalty is levied if the subscriber fails to deposit the minimum amount in a financial year. 

6. How long does it take for the SSY account to mature? 

An SSY account matures after 21 years from the date the account was started. 

7. Is the SSY scheme available throughout India? 

Yes, an SSY account can be opened anywhere in India.  

8. Should I invest in SIP or Sukanya Samriddhi Account?

Since the investment period for a Systematic Investment Plan (SIP) and the Sukanya Samriddhi Account are long-term, there have been many a debate on which is the best investment channel to avail maximum benefits in the future.

SIP is a method of investing in the stock market through mutual funds on a regular scale, whereas, the investment in SSA is 100% debt-based. When you invest in the stock market for an extended period of time, i.e., more than 14 years, historical data reflects that the returns are huge. These returns not only tackle inflation, but also help your money grow. However, these investments are subject to market risks. In the case of a debt investment tool such as SSA, the interest rate is flexible; so, in the long run, the returns may not be able to meet the inflation and tax. However, the element of risk in a debt-based investment is very low. So, this channel of investment is ideal for individuals who are not willing to endure stock market risks.